We often hear the need for growth and the paradox of thrift as a justification for low rates but so far this cycle it does not seem to work... despite an aging population and a rising number of retiree, both Japan and Germany have seen a rise in household savings since adopting negative rates which, obviously, is not the desired outcome of such policy. Maybe we should start talking about the paradox of cheap money.
We often hear the need for growth and the paradox of thrift as a justification for low rates but so far this cycle it does not seem to work... despite an aging population and a rising number of retiree, both Japan and Germany have seen a rise in household savings since adopting negative rates which, obviously, is not the desired outcome of such policy. Maybe we should start talking about the paradox of cheap money.